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Irrelevant Relationship: Oil Inventory levels and prices
Record high prices without record low oil inventories, analysts saying that so much money flows into oil commodities that it gives the impression of shortages, when in fact no shortage exists.

That mirrors the situation in the commodities market for food, as Bloomberg pointed out in its April 28 article, "Wall Street Grain Hoarding Brings Farmers, Consumers Near Ruin": "Commodity investors control more U.S. crops than ever before, competing with governments and consumers for dwindling food supplies."

That’s right; food, oil and gasoline have become an "asset class." No longer are you fighting a neighbor at the supermarket over the last box of Cheerios®; now you’re fighting the futures traders, who are actually determining what you will pay for that cereal.

http://www.star-telegram.com/ed_wallace/story/659081.html Read Article



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budfrogS4budfrogS4 - 6/5/2008 5:28:54 PMView My AgentSpace
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I don't doubt that this article is at least partially true but that doesn't mean that we shouldn't be working towards making ourselves able to pay for $5 gas by smarter living through more efficient cars and reducing our driving.

Btw, Sen. Lugar and Gramm should be shot, hung or whatever else you can think of.

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DieselRulesDieselRules - 6/5/2008 8:25:34 PM
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I'd rather get a sporty yet frugal car, pay LESS for fuel, and drive MORE! :)
(both Audis are going up for sale and we're ordering a Jetta TDI Wagon, Highline with leather, etc., which will immediately get Eibach Sport springs and 18" alloys with Z-rubber for the summer)
We'll go with 1 car for a bit, but probably pick up another Audi when we can get a TDI in an A4 Avant or Q5 (or R8) in the future.
And we'll be running B40, which is the most Bio I can buy locally.


cktoocktoo - 6/6/2008 8:18:15 PM
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Hey bud, you forgot Clinton too,...who actually signed the 2000 bill. All politicians suck, it just amazes me that there are so many people in the country that want to give these a-holes so much power in Washington.


MZautoMZauto - 6/5/2008 7:01:46 PM
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$5 GAS! Who is making money now? Oil companies, or the government, or the Bush family?

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lewishamiltonpimplewishamiltonpimp - 6/5/2008 7:24:24 PM
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MZauto, you are mistaken and listen to too many ill-informed talkin heads. The oil companies make about 12-13% profit. Microsoft made 35% (3 times as much) yet I don't hear you bitching about their 'record' profits.

The oil companies sell a lot so their profits are a lot but not with respect to their sales.

Tell me...if you had a lemonade stand and the cost of your lemons went up by a factor of 4, how much would your lemonade cost?


GodfatherSHMGodfatherSHM - 6/6/2008 9:11:42 AM
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your an idiot...oil companies do not set the price of oil, or even gas. Check the NYMEX if you want to see who is controlling our prices. People need to wake up and stop blaming the wrong people, and the "blame Bush" just shows one complete ignorance. Next time do some research before writing a response.


neutralneutral - 6/6/2008 1:19:01 PM
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SteedPub,

I try to stray away from blaming presidents for good/bad economies. I always hear the "when Clinton was president, the economy was great" followed by "this is why democrats are better." This is obvious liberal ranting at its dumbest.

HOWEVER, to say Bush isn't to blame is ignorant, for untold numbers of reasons.

1) Price of oil is tied to the value of the US Dollar. Fortunately for the US, Bush has been trying his hardest to destroy the value of the US dollar. Un-controlled spending, disasterous fiscal policy, and the fact that we are wasting hundreds of billions in Iraq with no returns are driving the dollar further & further down.

2) To say the Bush admin (and congress in general) has no contacts with oil companies is ridiculous. Just imagine this... you run a company that is controversial, but makes tens of billions in profits a year----aren't you going to spend TONS of money on lobbyists and shady dealings?

3) Bush has applied almost no pressure on OPEC to produce more oil. What I do recall is that when oil bottomed out a year and a half ago (thereabouts), Bush decided to start a spitting match with Iran and since then, the price of oil has skyrocketed (for various reasons obviously, but whining about Iran isn't helping). Bush has not played hardball with any of the Arab countries and now that we haven't got ANY leverage in the middle east, we're kind of screwed. Sad truth of the matter was we were a ton better off with Saddam running Iraq, we had a reliable supply, we weren't spending billions on our military being there, and we could play one arab country against the other for cheaper oil. Thanks for f**king that one up Bush.

4) There needs to be control of the speculators. They are the real reason oil is kicking up the way it has been. I don't care what anyone has to say about the speculators controlling prices in some theoretical fairy-tale land, they're responsible. We should pass a law that states if you buy oil on the market, you have to physically accept that oil. In other words, demand is controlled because if you want to buy a "future", you physically buy oil, store it, and sell it later. Lord knows this law will NEVER get passed because of the oil lobby and the financial lobbyists.

5) The Govt gives oil companies somewhere around 18billion a year in tax credits. WHAT THE HELL!!! Those tax credits need to be taken away from oil and split up amongst Ford, GM, and Chrysler. The govt imposes all these ridiculous regulations on fuel economy and emissions, but expects detroit to cough up the cash. Enough is enough. 6 billion to each automaker would do WONDERS, not only for these comapnies but for the US economy in general. Whats the point in giving Exxon billion in tax credits when they're already making tens of billions in profits.

6) Lastly, the Bush admin hasn't even publicly mentioned opening up previously off-limits US oil fields to production. There is oil in the


DieselRulesDieselRules - 6/5/2008 8:38:13 PM
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In Canada we pay higher prices because of a huge Federal Tax that is supposed to go into road and bridge repair and maintenance.
Not a penny is spent on road maintenance.
And the rate was set when gas was less than a fifth the cost that it is now.
So, in Canada at least, the Gov't makes most of the money.
(The Canadian tax department's official song is by Dire Straights: "Money for Nothing")

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SteedPubSteedPub - 6/5/2008 9:42:09 PM
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So tiring this is all getting. Schools dont teach the common tenets of supply and demand, economics anymore and it is beginning to show.

Oil is high, not because there is a shortage in the world supply. Oil is high because China and India are willing to pay a lot for it, thus the oil market is adjusting for that. We have to compete in that market, thus we have to pay more if we want some of it.

Increasing supply here at home, will allow us to import less oil, and may lower prices some.

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johannasjohannas - 6/6/2008 10:06:08 AM
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At the beginning of 2008 the price for a barrel of light crude was about $95, 4 months later it's topping $135. That dramatic of an increase in such a short time cannot be explained by worldwide demand alone. It probably plays a part, but I would bet that at least $20 of that increase is from commodities traders spooking the market.


NARunnerNARunner - 6/6/2008 7:42:20 PMView My AgentSpace
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Actually countries like India and China subsidize oil for their residents, so the "consumers" aren't paying those prices...they won't do that forever at these prices


M35MTM35MT - 6/6/2008 8:03:58 AMView My AgentSpace
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You wouldnt be online without wall st, or free market capitalism, for that matter.

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ChicaneShooterChicaneShooter - 6/6/2008 9:40:02 AM
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evilmonkey SHOULDN'T be online without a responsible adult supervising.



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holmstarholmstar - 6/6/2008 10:18:59 AMView My AgentSpace
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Bottom line, I think that there is just too much money in the market. First money flooded into the dot com industry, then money flooded into the real estate market, now its flooding the commodities market, and when the bottom drops out of the commodities market it will be something else, I can almost guarantee it. And all of us just get taken allong for the ride.

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SteveLSteveL - 6/6/2008 2:58:41 PM
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Again, we are all just getting totaly ripped off by the oil company's and our government, all of them!!!

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NARunnerNARunner - 6/6/2008 7:46:52 PMView My AgentSpace
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Man, i wish most of the people posting on this site would get an education. It would make debates like this much more fruitful and worth while.

Check out this article from Fortune to get an idea of the oil/commodities bubble forming and why. It wouldn't kill many of you to use your brain and learn something every once in a while...like basic economics. Leave the conspiracy theories behind.

http://money.cnn.com/2008/06/06/news/economy/tully_oil_bust.fortune/index.htm?postversion=2008060610


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NARunnerNARunner - 6/6/2008 7:49:01 PMView My AgentSpace
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And wouldn't you know, not one mention of President Bush!
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